Correlation Between Fidelity Trend and Cardinal Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Trend and Cardinal Small at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fidelity Trend and Cardinal Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Trend Fund and Cardinal Small Cap, you can compare the effects of market volatilities on Fidelity Trend and Cardinal Small and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fidelity Trend with a short position of Cardinal Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Trend and Cardinal Small.
Diversification Opportunities for Fidelity Trend and Cardinal Small
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Cardinal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Trend Fund and Cardinal Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Small Cap and Fidelity Trend is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fidelity Trend Fund are associated (or correlated) with Cardinal Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Small Cap has no effect on the direction of Fidelity Trend i.e., Fidelity Trend and Cardinal Small go up and down completely randomly.
Pair Corralation between Fidelity Trend and Cardinal Small
Assuming the 90 days horizon Fidelity Trend Fund is expected to generate 1.23 times more return on investment than Cardinal Small. However, Fidelity Trend is 1.23 times more volatile than Cardinal Small Cap. It trades about 0.12 of its potential returns per unit of risk. Cardinal Small Cap is currently generating about 0.03 per unit of risk. If you would invest 10,293 in Fidelity Trend Fund on September 13, 2024 and sell it today you would earn a total of 11,191 from holding Fidelity Trend Fund or generate 108.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Trend Fund vs. Cardinal Small Cap
Performance |
| Timeline |
| Fidelity Trend |
| Cardinal Small Cap |
Fidelity Trend and Cardinal Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Trend and Cardinal Small
The main advantage of trading using opposite Fidelity Trend and Cardinal Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Trend position performs unexpectedly, Cardinal Small can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cardinal Small will offset losses from the drop in Cardinal Small's long position.| Fidelity Trend vs. Fidelity Stock Selector | Fidelity Trend vs. Fidelity Focused Stock | Fidelity Trend vs. Fidelity Disciplined Equity | Fidelity Trend vs. Fidelity Stock Selector |
| Cardinal Small vs. New Economy Fund | Cardinal Small vs. Vanguard Growth Index | Cardinal Small vs. Fidelity Trend Fund | Cardinal Small vs. Kinetics Paradigm Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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